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1 Which of the following would be classified as external information for business?

A report on consumer attitudes prepared by a market research company

A safety conformance report prepared by the business safety officer

Sales analysis reports prepared by area sales managers

Employee details on the payroll database

2 What is the correct cost accounting entry in an interlocking system for the payment of wages?

Dr Wages control Cr Cost ledger control

account account

Dr Wages control account Cr Bank account

Dr Cost ledger control Cr Wages control

account account

Dr Bank account Cr Wages control account

3 In which department is a purchase order usually prepared?

Goods received department of the buying organisation

Dispatch department of the supplying organisation

Inventory stores department of the buying organisation

Purchasing department of the buying organisation

4 Which of the following may be used as classifications for raw materials used in product manufacture?

(
1 Direct cost
)
(
Functional
2
cost
)
(
3 Variable cost
)

1 and 2 only

1 and 3 only

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2 and 3 only

1, 2 and 3

5 The responsibilities of the manager of a business division include decisions relating to long-term assets.
What type of responsibility centre is described above?
Profit centre

Cost centre

Investment centre

Revenue centre

6 Each unit of product P requires 1.6 kg of material M. A purchase order is to be placed for material M
sufficient to provide for the manufacture of product P for the next two months and for 520 kg or material
M to remain in inventory at the end of month 2.

460 kg of material M is in inventory at the beginning of month 1 and manufacture of product P will be as
follows:

Month 1 400 units

Month 2 560 units

What is the size of the purchase order that must be placed for material M?
1,536 kg

1,476 kg

1,596 kg

1,480 kg

7 A piecework scheme of labour remuneration applies to all direct workers in a factory. The scheme for each
individual is as follows:

$
1 per
Up to 250 units produced in a week
4 unit
Between 251 and 300 units produced in a 1 per
week 7 unit
2 per
Over 300 units produced in a week
0 unit

Only the additional units produced qualify for the higher rates. Units that fail inspection do not qualify for
any payment.

Direct worker X produced 320 units in week 4 but 30 units failed inspection.
What wages were paid to direct worker X in week 4?
$4,180

$4,750

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$4,930

$6,400

8 A factory cost centre absorbs overhead on the basis of machine hours. In a period the budgeted overhead
costs and budgeted activity in the cost centre were $144,000 and 4,100 machine hours respectively. Actual
overhead costs and actual activity in the period were both below budget at $142,600 and 3,950 machine
hours respectively.

What was the predetermined overhead absorption rate per machine hour (to the nearest $0.01)?
$35.12

$34.78

$36.10

$36.46

9 A trainee accountant is receiving some spreadsheets, and he has asked you to look at the following:

What is being highlighted about the entry for October?

That it is a precedent for the total

That it contains a circular reference

The formula used to calculate the monthly total is different to the formulas used in other months

The figure has recently been deleted

10 When using Excel spreadsheets which of the following can be protected?

(
1 Individual cells
)
(
A range of cells within a
2
worksheet
)
(
3 An entire worksheet
)
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1, 2 and 3

2 and 3 only

1 and 2 only

1 and 3 only

11 Are the following statements, about weighted average methods of raw materials pricing, true or false?

( The periodic weighted average method requires the recalculation of the issue price after each issue is
1 made
)
( Fluctuations in issue price are reduced if the cumulative, rather than the periodic, weighted average
2 method is used
)

Both statements are true

Statement 1 is true and statement 2 is false

Statement 1 is false and statement 2 is true

Both statements are false

12 ABC Co made the following purchases of material X:

Unit Price
s ($)
1 January 20X1 500 1.50
1,00
1 February 20X1 2.00
0
1 March 20X1 750 2.50
1 April 20X1 500 1.50
1,50
1 May 20X1 2.00
0
1 June 20X1 750 3.00

On 1 July 20X1 the company used 2,000 units of material X.

Using the first-in first-out (FIFO) method of inventory valuation what is the value of the 2,000 units of
inventory used on 1 July 20X1?

$4,000

$4,750

$6,000

$3,000
13 Zed Co uses process costing for product Alpha.

Production began on 1 September and there was no work-in-progress brought forward. During the
production period 600 kg of raw material were input to the process and 200 kg of the finished product
were output from the process.
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At the end of the period work-in-progress was 80% complete with respect to materials and 60% complete
with respect to conversion costs.

During the production process no losses occurred.

What are the equivalent units for materials at the end of the production period?
600 kg

520 kg

440 kg

560 kg
14 member of the sales team is compiling a spreadsheet to show the value of discounts given to a customer,
as follows:

Which of the following formulae could be entered into cell C6 and then copied down to give the correct
discount figures for all the months under review?
=B$6*B$3

=B6*$B3

=B6*B$3

=$B6*$B3

15 Liz wishes to create an Excel formula which multiplies the contents of cell A1 with the total contents of
cells B1, B2, B3, B4 and B5.
Which of the following shows a formula Liz could use?
=A1*SUM(B1:B5)

A1*SUM(B1:B5

=A1*B1+B2+B3+B4+B5

=A1*AVERAGE(B1:B5)

16 Which of the following is the most appropriate formula to enter into cell B6?

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=B4+20%

=B4*B11

=B8/1.8

=B8-B4

17 The following relate to computer data processing:

(
It involves transactions being grouped and stored prior to
1
processing
)
(
It involves transactions being input and processed as they
2
occur
)
(
3 It is quicker than manual data processing
)
(
4 A system will not always be up-to-date
)

Which of the above is/are true of real time computer data processing?
2 and 3

2 only

1 and 4 only

1, 3 and 4

18 Which, if any, of the following are ADVANTAGES of having a centralised office function?

( Junior managers have more opportunities to take

1 on responsibility
)
( Expensive equipment can be used more
2 economically
)

Both 1 and 2

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1 only

2 only

Neither 1 nor 2

19 Which of the following is MOST likely to be a task of the accounts department?

Setting the sales budget

Establishing procedures for hiring staff

Negotiating prices and discounts with suppliers

Paying suppliers' invoices

20 Which of the following is NOT a requirement of useful management information?

Timely

Cost beneficial

Complete

Budgeted

21 The following information is provided for component X:

( 2,400 units are in the

1 stores
)
( 6,700 units are on
2 order
)
( 1,600 units are
3 scheduled for use
)

What is the amount of 'free' inventory?

7,500 units

800 units

2,400 units

10,700 units

22 A company manufactures motor vehicles. In the accounts' coding system, the code for a particular vehicle
model is Ve/26 and the code for the passenger door in that model is Ve/26/12.

Using the same coding structure which of the following could represent the code for the panel in the
passenger door of that particular vehicle model?

Ve/29

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Ve/26/12/08

Ve/26/15

Ve/27/12

23 The following information shows the power costs and supervision costs incurred by an organisation at
different levels of capacity utilisation.

Capacity 70 80 90 100
utilisation % % % %
Power ($'000) 36 39 42 45
Supervision ($'000) 23 25 25 25

What cost behavioural classifications can be identified?

Power: semi- Supervision:

variable fixed

Power: Supervision: stepped-

variable fixed

Power: semi- Supervision:

variable stepped-fixed

Power: variable Supervision: fixed

24 A business has a net profit margin of 12.0% and asset turnover of 1.4 times.

What is the return on capital employed?

16.80%

8.60%

11.70%

13.40%

25 In a cost accounting system what would be the entry for the issue of INDIRECT materials to a production
cost centre?

Dr Production overhead Cr Raw materials

account account

Dr Raw materials Cr Production overhead

account account

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Dr Raw materials Cr Work in progress

account account

Dr Work in progress Cr Raw materials

account account

26 An employee has a normal working week of 40 hours paid at a basic rate of $10 per hour. Hours in excess
of normal are paid at a premium of 30%.

In a particular week the employee worked for 44 hours. Tax is payable at 20% of gross wages and benefit
contributions for the employee for the week were as follows:

$
Employ 2
ee 5
Employ 3
er 7

The employee's net pay for the week was $336.60.

What was the employee's gross pay for the week?
$492.00

$452.00

$478.32

$498.25

27 Budgeted production overheads, allocated and apportioned to the four cost centres in a factory for a
period, are as follows:

Production cost Service cost centres

centres
PCC1 ($) PCC2 ($) Stores Maintenance
($) ($)
28,600 21,800 6,200 8,160

Material requisitions and maintenance hours in the period are budgeted to be as follows:

Material requisitions Maintenance hours

PCC 300 80
1
PCC 200 90
2

What is the total budgeted overhead in PCC2 after re-apportionment of service cost centre overheads?
$28,600

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$29,360

$35,400

$36,160

28 Jane works for XYZ Co. She has created a spreadsheet which lists contact details for all XYZ Co's clients.

Which spreadsheet functions should she use to display details for all clients based in the South region,
ordered alphabetically?
Ranking and linking

Filtering and ranking

Filtering and sorting

Sorting and ranking

29 What in the use of spreadsheets is known as a cell?

The formula placed in a particular location

A workspace divided into rows and columns

The formatting of numbers

The intersection of a row and a column

30 At the end of its financial year a manufacturing company has the following materials held in inventory:

( 100 toy cars which are complete but require packaging prior to being sold or
1 dispatched
)
( One ton of plastic which will be moulded into various products
2
)

Which of the following is the correct classification for the toy cars and the plastic?
Toy cars are finished goods and the plastic is raw material

Both the toy cars and the plastic are work in progress

Toy cars are work in progress and the plastic is raw material

Toy cars are finished goods and the plastic is work in progress

31 Which of the following is/are items that would be separately included in a job cost?
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( Cost of sales
1
)
( Direct labour
2
)
( Selling
3 overhead
)
( Profit
4
)

2, 3 and 4

1 only

2 and 3 only

3 and 4 only

32 Daz Co uses process costing and a number of separate processes:

(
Process Alpha has losses of 5% of
1
input
)
(
Process Beta has losses of 3% of
2
input
)

Both processes have the same inputs.

Which of the following statements is/are true in relation to these processes?

(
The Alpha total process cost is the same as the Beta total
1
process cost
)
(
The Alpha cost per unit is higher than the Beta cost per
2
unit
)

Statement 1 only

Statement 2 only

Both statements

Neither statement
33 Which of the following are the main benefits of spreadsheets to the work of management accountants?

(
1 The ability to embed files produced using word processing software
)
( Linking of spreadsheets so that changes in data automatically feed from
2 one page to another

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)
(
3 The facility to perform 'what if' calculations
)

1, 2 and 3

2 and 3 only

1 and 2 only

3 only

34 The following statements are about documentation for direct materials requests:

(
A materials requisition is completed after materials have been
1
received by the production department
)
(
The buyer prepares a purchase order to ask for goods to be
2
supplied
)

Are the statements true or false?

Statement 1 is false and statement 2 is true

Both statements are false

Both statements are true

Statement 1 is true and statement 2 is false

35 There is an error in cell J3 of this spreadsheet:

Which of the following formulas could have caused this error?

=I3/H3

=I3/H2

=I3/H4

=I3/I3

36 Which of the following statements about information are true?

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(
Information is data that has been processed in such a way as to
1
be meaningful to the recipient
)
(
The purpose of management information is to assist the
2
efficient and effective management of resources
)

Both statements

Statement 1 only

Statement 2 only

Neither statement

37 Which of the following statements concerning the use of cost codes is/are true?

(
The classification of costs is
1
simplified
)
(
Electronic data processing is
2
facilitated
)

Statement 2 only

Both statements

Neither statement

Statement 1 only

38 The packaging section in a warehouse operates a piecework payment system as follows:

Units packed Piecework rate

per unit ($)
1 to 5,000 0.04
5,001 to 8,000 0.05
8,001 and above 0.06

Only aDditional units packed, over the previous threshold, are paid at the higher rates.

If 8,340 units are packed what are the wages?

$367.00

$370.40

$420.40

$500.40

39 The following statements relate to absorption and marginal costing:

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(
Absorption costing profit will always be higher than marginal costing
1
profit in any period when inventory is increasing
)
(
Inventory valuations will always be greater if absorption costing rather
2
than marginal costing is used
)

Which of the statements are true?

Neither statement

Statement 1 only

Both statements

Statement 2 only

40 Which of the following may be used to measure performance in a profit centre?

( Net profit margin

1
)
( Residual income
2
)
( Return on capital
3 employed
)
( Asset turnover
4
)

2, 3 and 4 only

1, 2, 3 and 4

1 only

1 and 4 only

41 What is a cost unit?

The unit cost of direct materials and direct labour

The cost per unit of output

A basis for cost classification

A unit of output in relation to which costs are ascertained

42 A company manufactures product Z. A team of six direct operatives currently manufactures five units of
the product in one hour. Each operative is paid at $8 per hour.
If productivity (output per hour) reduces by 10% what will be the direct labour cost per unit of product Z
(to two decimal places)?
$9.60

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$8.64

$10.56

$10.67
43 For direct workers how are overtime premiums and idle time costs normally accounted for?

Overtime premiums: Indirect cost Idle time: Direct cost

Overtime premiums: Direct cost Idle time: Direct cost

Overtime premiums: Direct cost Idle time: Indirect cost

Overtime premiums: Indirect cost Idle time: Indirect cost

44 Would each of the following be classified as a direct or an indirect cost?

( The parts used by a vehicle mechanic in the repair of a car for a customer
1
)
( The salary of a factory manager
2
)
( The wages of a factory maintenance department
3
)

Direct: 1 and 2 Indirect: 3

Direct: 1, 2 and 3 Indirect: -

Direct: 1 Indirect: 2 and 3

Direct: - Indirect: 1, 2 and 3

45 Which of the following documents would form part of the purchasing system?
( Purchase invoice
1
)
( Goods received note
2
)
( Purchase requisition
3
)

1, 2 and 3

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1 and 2 only

1 and 3 only

2 and 3 only

46 Which of the following can be contents of a spreadsheet cell?

(
Formu
1
la
)
(
2 Text
)
(
3 Value
)

1 and 2 only

1 and 3 only

2 and 3 only

1, 2 and 3
47 Which of the following use process costing?

(1
Education provision
)
(2
Accounts preparation
)
(3
Soft drink production
)
(4
Oil refining
)

1 and 2

3 and 4

3 only

1 only

48 In a spreadsheet which menu options should be selected in order to save a copy of the current
worksheet whilst leaving the original document intact?
File and Save

File and Save As

Insert and Save

Insert and Save As

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49 A company has two production cost centres, M and L. M absorbs overheads on the basis of machine hours
and L absorbs overheads on the basis of labour hours. The following information is available for the next
period:

Cost centre M L
Allocated and apportioned production $400,0 $600,0
overheads 00 00
150,00
Direct labour hours 50,000
0
Machine hours 80,000 30,000

Job ABC will require four machine hours and three labour hours in each of the two production cost
centres.

How much production overhead will be absorbed by job ABC?

$44

$64

$31

$32

50 Which of the following statements relating to management accounting reports are true?

(
They have a standard
1
format
)
(
They are prepared for
2
internal use
)

Both statements

Statement 2 only

Neither statement

Statement 1 only

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